Greece vows to implement tough new budget cuts
“Every day has huge value and we cannot afford to lose a single hour,” Finance Minister Evangelos Venizelos, who took over the post on Friday, told reporters in Luxembourg after talks with his European peers.
Eurozone finance ministers called emergency talks on Greece for July 3 to finalise a second financial rescue package to avert a default.
Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of eurozone finance ministers, voiced hope that by then the Greek parliament will have adopted a new austerity plan.
Overnight, eurozone finance ministers said that the next €12 billion from an EU-IMF rescue package agreed last year will be released strictly on condition that Greece adopts the latest round of highly unpopular measures.
Provided the Greek lawmakers approve the package this slice of the first bailout loan worth €110 billion overall would be released early in July to avoid a default.
Venizelos said it was imperative that a new wave of austerity measures worth over €28bn by 2015 be approved by the end of the month.
“It is essential... to stabilise the situation and disburse the fifth loan instalment. To achieve this, the mid-term programme and the law applying it must be voted by the end of June,” said the minister following talks with EU officials.
Formerly Greece’s defence minister, Venizelos is next to meet representatives from the European Union, the International Monetary Fund and the European Central Bank, which rescued Greece from bankruptcy last year.
Members of the tripartite mission, also known as the “troika” in Greece, will be in Athens today and tomorrow.
The finance ministry has indicated that the troika mission chiefs who have held quarterly audits of Greek finances will be heading the latest visit.
Prime Minister George Papandreou, who shuffled his government on Friday as part of a new drive to tackle the debt, yesterday faced further difficult talks in Brussels on a big second rescue which Greece needs to have a hope of avoiding default on its debt in the months and years ahead.
His new team tonight faces a vote of confidence in the face of distress and anger among the Greeks.
A Finance Ministry source said the government was “confident about the adoption of this plan by parliament”, where the Socialist government holds 155 seats out of 300, in a vote on June 28.
For the European Union, the issue of a second rescue raises much wider problems of how to ensure that banks, insurance companies and investment funds holding Greek debt bonds shoulder part of the cost. But they want to achieve this without provoking mayhem on financial markets and putting the eurozone at further risk.
The European Central Bank has warned EU policymakers that, if the terms of a redrawing of Greek debt repayments is badly received on financial markets, the central bank may cease providing lifeline funding to the Greek banking system.
Papandreou faces opposition from some of his own members of parliament and lacks support from the opposition right-wing parties.
Greek observers say that Papandreou should win both the confidence vote and the vote on the new budget measures, but could still face opposition politically and on the streets.
The main Greek trade union organisation, GSEE, has called a general strike lasting 48 hours on a day to be chosen depending on events in parliament.
The electricity generating company DEI has warned that the country could be hit by power cuts after the union representing its workforce called for a rolling strike over its privatisation to raise funds.
The groups of so-called “indignant” people protesting against cutbacks and reforms by the government, who have been camping in Syntagma Square in central Athens since May 24, are also planning a new demonstration tonight during the vote of confidence.
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